Many of us have loans and they can be extremely useful. We can use loans to pay for things and then spread the cost so we can afford things that we would not normally be able to. This allows people to get a university education, buy a home or drive a car which can be extremely useful and can lead to a better financial future for different reasons. However, there are also some of us that have loans that we would like to repay. This could be because we want to borrow, perhaps to buy a home and feel that having another loan, perhaps an overdraft, will stop lenders being so interested in allowing a mortgage. It could be that you have had a loan from the likes of Omacl.co.uk a while and are ready to repay it as well. Whatever the reason, it is worth using a methodical approach to repaying it so that you know that you are prepared.
- Find out how much you owe – you need to start by looking at how much you owe. It can actually be quite scary doing this and it might be a big stumbling block. However, it needs to be done and so you need to be brave and have a look. It doesn’t matter how much it is, it can all be repaid eventually but you need to know so that you can come up with a solution to repaying it all.
- Set a date to repay the loan– it is a good idea to think about when you want to have the loan repaid by. It might be that you have a particular date in mind, perhaps before you get married, have a milestone birthday or something like that. Otherwise you may not be too sure, but it is good to focus on a particular date. This is because you will be more determined to stick to a plan to get it paid off and can get it done. If you leave the date open then it could take you years or even decades longer to repay it and this will mean that it will cost you a lot more than necessary.
- Pay off a chunk with savings – if you have some savings then it can be a good idea to look at how much interest you are getting on them. You need to then compare this with the interest that you are paying on the loan. It is very likely that you will be paying more interest on the loan that you are receiving in interest on your savings. This means that you will be better off financially by paying off the loan (or some of the loan) with the money that you have in the savings account. This can be a tricky thing to do as saving money is not easy. We may have made sacrifices to put that money in the savings account or it might be to pay for something specific. This could mean that you will be very reluctant to part with the money. However, it is important that you bear in mind what you will gain by using it to pay off debt and note that you will be able to save the money again at some point should you need to.
- Whittle it down bit by bit – you may need to whittle away at the loan little by little if you do not have a chunk of money that you can use to pay it off. This can be a manageable way to repay without having to feel like you are paying out too much. You will need to work out how much you will be able to afford to repay each time. It might be that you normally have a little money left over each month that you can put towards it. However, it might be that you will need to reduce your spending somewhere or find a way to earn a bit more money so that you have enough to make those regular payments.
- Find ways to pay off extra chunks – it can be good to also see if you can find a way to pay off chunks as well. This will allow you to reduce the amount that you owe more quickly. You will have to think of some ways that you can get extra money to be able to do this. It could be that you will be able to find some ways to earn some extra money, perhaps by doing some overtime or some freelance work or even some online work. You might be able to also reduce your spending in some areas so that you are able to free up some money to pay a chunk off the loan as well. You might be able to sell some things that you no longer need so that you can raise some money as well.